Inside Politics

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: There is a legal process here. I have done my best to avoid politicizing it.

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BERNARD SHAW, CNN ANCHOR: But the Elian Gonzalez case is politically charged as ever as the custody battle over the Cuban boy takes on new urgency. Also ahead, was it merely a photo-op or a potential pairing for the Republican presidential ticket?

Plus...

(BEGIN VIDEO CLIP)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: 2000 looks like it will be close with hand-to-hand combat over every piece of disputed territory.

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SHAW: Bill Schneider on the states where a vice presidential choice could make a difference.

ANNOUNCER: From Washington, this is INSIDE POLITICS, with Judy Woodruff and Bernard Shaw.

SHAW: Thanks for joining us. Judy is off today. We begin with the man who, lame duck or not, still can grab the political spotlight merely by calling a news conference, especially when the action on the 2000 campaign trail is a little slow.

This afternoon, President Clinton talked about gas prices and some other issues of interest this election year, as well as some matters he might have preferred to avoid.

Here is our senior White House correspondent, John King.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): The president saluted OPEC's decision to raise crude oil production and voiced hope consumers would see relief at the gas pump soon, but he said there was a lesson to be learned from this winter's high prices: that the United States needed to rededicate itself reducing its reliance on fossil fuels.

CLINTON: I hope this has been a sobering experience for the American people and for all of us in that we can now do more.

KING: Some congressional Republicans want to repeal a 1993 increase in the gas tax that became law only after the vice president cast the tie-breaking vote. There's bipartisan opposition, and Mr. Clinton says he doubts the measure will reach his desk and also doubts the savings would be passed on to consumers. But he passed up a chance to flatly rule out signing the repeal if it did pass the Congress.

Mr. Clinton's opening statement was largely a recitation of a familiar final-year legislative agenda. He wants Congress to pass new gun controls; a health care patients' bill of rights; an increase in the minimum wage; a new prescription drug benefit for Medicare recipients; and legislation granting China permanent normal trade relations with the United States.

Twenty-two questions in all, and some ghosts of the past as the president tried to look ahead. Mr. Clinton took issue with a federal judge's ruling that the president violated the Privacy Act when he released letters from former White House volunteer Kathleen Willey during the Monica Lewinsky investigation.

CLINTON: The opinion of our counsel's office and many -- and other judges who've ruled on this is that that act does not apply to this kind of correspondence in the White House. And so we disagree and we'll proceed accordingly.

KING: And the president said he believed it was a computer problem, not any wrongdoing, that kept the White House from finding and turning over e-mails from Lewinsky and others that were covered by congressional subpoenas.

CLINTON: I believe that it is accurate to say that we had turned over everything that had been found, and from what I understand some things were not found because they were in a different system. And so now we're working on how to cooperate with the Congress.

(END VIDEOTAPE)

KING: There were no new major announcements, but reminder after reminder that the president's crowded agenda is running up against the calendar. He has just 10 months left in office, and because it's an election year, Congress likely to be in session only five or six of those -- Bernie.

SHAW: John, on campaign finance reform, how does the president feel about his vice president feel about describing himself as imperfect for reform? And how does Mr. Clinton feel about the Democratic (sic) endowment fund? KING: Let me take them in reverse order. The president laughed and said he wished he had thought of it himself when asked about the vice president's plan for a tax-deductible endowment, if you will, to fund political campaigns. Some believe it won't work, but the president said he thought it was the best idea he had heard of.

Now, on the other question, that was about the only time in this news conference the president turned a little bit testy. He was, if by saying that he was an imperfect messenger, had not the vice president also suggested that the president and the entire administration had perhaps violated the spirit and the letter of campaign finance laws. The president insisted he had not, also insisted it was the Democrats trying to clean up the system now. Again, the president saying he thought the vice president was on to something here.

This issue, the campaign finance issue, just like the Willey and Lewinsky issues -- as the president tries to look ahead, he's often asked about the past -- Bernie.

SHAW: OK, John King, at the White House.

This update for you now on the legal and political maneuvering in the Elian Gonzalez case. U.S. Immigration officials are meeting with the boy's Miami relatives in Florida at this hour, a meeting that could set the wheels in motion for Elian's return to Cuba.

(BEGIN VIDEOTAPE)

SHAW (voice-over): Four months since Elian Gonzalez was picked up off the coast of Florida, this case has come down to this: If his Miami relatives don't agree to turn him over if they lose their court fight, the Immigration and Naturalization Service could take him from his Miami home as early as 9:00 a.m. Thursday. No one expects the government to try remove him by force, except perhaps the community that's sheltering him.

In Little Havana, some of Elian's supporters say they'll form human chains, lie down in front of cars, even give up their lives to prevent him from being sent back to Cuba. The mayor said he would not help the federal government in any way.

MAYOR ALEX PENELAS, MIAMI DADE COUNTY, FLORIDA: If their continued provocation in the form of unjustified threats to revoke the boy's parole leads to civil unrest and violence, we are holding the federal government responsible, and specifically Janet Reno and the president of the United States for anything that may occur in this community.

SHAW: Passionate words that drew a careful response from the president.

CLINTON: I like the mayor very much, but I still believe in the rule of law. We all have to -- whatever the law is, whatever the decision's that ought to be made, the rest of us ought to obey it.

SHAW: In Cuba, President Fidel Castro said he fears Miami's Cuban community will spirit Elian away if they run out of prisons.

On Capitol Hill, an 11th hour attempt to find compromise from New Hampshire Senator Bob Smith and Florida's Senate delegation.

SEN. BOB SMITH (R), NEW HAMPSHIRE: This bill that we are -- that Senator Graham has co-sponsored with me and introduced with me along with Senator Mack provides for permanent residency for the entire Gonzalez family in Cuba. And by that, I mean Elian himself, Elian's father, Juan Gonzalez, Juan Gonzalez's current wife and child, both grandmothers, and a grandfather.

SHAW: Congress has so far refused efforts to grant Elian citizenship. It's not clear if the permanent resident bill will win more support.

(END VIDEOTAPE)

SHAW: Now let's talk about the Elian Gonzalez case and the political ramifications with Tom Fiedler of "The Miami Herald."

Tom, in the piece we just saw and heard, politically what message was the mayor sending?

TOM FIEDLER, "MIAMI HERALD": Well, I think he was sending two messages. One was to the community here, which said that I understand your feelings and I'm on your side, but I think he also was sending a very clear message to the administration -- and arguably, directly to Vice President Gore -- that if you care about winning Florida this fall in the presidential campaign, something needs to be done to have the INS back off here and let this process proceed in a slower way, if not a more orderly way.

SHAW: And what are the Florida senators especially about?

FIEDLER: Did you say the Florida sentiment or the...

SHAW: Senators.

FIEDLER: Well, the Florida senators say in Washington, have been the prime movers behind the legislation that would give Elian Gonzalez citizenship and then the legislation that was just mentioned today in the report to provide permanent residency to the other Gonzalez family members in Cuba. The purpose of that is to in effect wrap the boy in the American flag should he go back so that he has the right at some point in his life to return to the United States as a U.S. citizen, or conversely to allow the family in Cuba to be able to travel freely to the United States and allow the boy to have, in effect, residence both in the United States and perhaps in Cuba.

It's a "solomonic" type choice, dividing -- if not dividing the boy, will divide the countries in half.

SHAW: Now given the presence of Governor Jeb Bush, Republican in Florida, who has the most to lose: Texas Governor George W. Bush or Vice President Gore? FIEDLER: Well, I think in this case it would be Vice President Gore, and that's because of the direct relationship between the mayor of Miami Dade County, Alex Penelas, and the vice president. They clearly have been allies. And if the vice president hopes to take Florida in the fall, his ability to do that would rest very largely on the shoulders of Mayor Penelas' ability to keep the Cuban-American community at least not from going totally to the Republican ticket. So at least in the immediate moment, I think the vice president has a great deal at stake.

Now, Governor Bush, Governor Jeb Bush of Florida has really remained quite distant from this situation, and in a lot of ways, I think he's following Wellington's axiom that if your enemy is in the process of committing suicide, don't interfere, as this right now is a very, very difficult situation for the Clinton administration, the Clinton-Gore administration to handle. And if it's -- if it's handled in any way that the people in the Miami Cuban community see as harmful to their boy, then that will have direct harm to the Gore presidential campaign.

So really, Governor Bush doesn't have to do anything here but allow the process to unfold.

SHAW: Tom Fiedler of "The Miami Herald," thanks very much.

FIEDLER: You're welcome.

SHAW: And coming up next, George W. Bush on the trail talking about education and a potential litmus test for his running mate.

Plus, the vice presidential landscape for Gore and Bush: We'll map out some of their possible choices, state by state.

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SHAW: After his primary season tact to the right, George W. Bush seemed to reach out to moderate voters today. He left the door open to choosing an abortion rights supporter as a running mate, even as a candidate who fit that bill stood beside him.

CNN's Jonathan Karl reports on the V.P. question and Bush's bid to stay focused on the education issue.

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JONATHAN KARL, CNN CORRESPONDENT (voice-over): Another day on the campaign trail, another school, this one an inner-city charter school in Newark, New Jersey.

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: This charter school shows that all children can learn, and I resent those who stand in the way for education reform, those who say that giving parents different options because they're dissatisfied with the status quo isn't right.

KARL: Bush says he's not running to be federal superintendent of schools, but he visits so many schools -- three in just the last week -- it sometimes seems as though he is. Newark's North Star Academy is one of some 1,700 charter schools in the U.S. A public school freed from most state and local regulations, North Star has school uniforms, strict discipline, a longer school day and an 11-month school year.

Bush says charter schools, which also have wide support among Democrats, illustrate his educational philosophy of providing public money with minimal regulations, as long as schools perform well.

BUSH: I do believe there is a role for the federal government, but I'm going to change the role, and the role ought to be, here's the money, show us the results.

KARL: Bush was joined by Christie Todd Whitman, an abortion rights advocate. With the New Jersey governor by his side, he was asked if he would consider choosing a pro-abortion rights running mate.

BUSH: I mean, I'm standing up here with a friend of mine. We disagree on some aspects of the issue. That doesn't mean we can't be pulling for the same thing, being on the same team, and I respect Governor Whitman's views and I respect her as a person.

KARL: So, is Whitman on his list of potential running mates?

BUSH: I respect her a lot. There are no lists.

KARL: Asked if she would accept, Whitman said she "would not hang up the phone" if Bush called to ask. After the school visit, Bush hit New York City and another fund raiser, where, with the help of the state's top Republicans, he pulled in $500,000.

(on camera): In less than a week, Bush has raised more than $2 million for his campaign, that's well on his way to reaching his goal of raising between $5 and $10 million to spend between now and the Republican convention this summer.

Jonathan Karl, CNN, New York.

(END VIDEOTAPE)

SHAW: When Bush and Al Gore choose their running mates, geography may play a much bigger role than ideology.

Our Bill Schneider has been thinking about the importance of vice presidential nominees and their home states -- Bill.

SCHNEIDER: Well, Bernie, when is the last time a running mate actually made a crucial difference in the outcome of a presidential election? Well, you'd have to go all the way back to 1960 -- that's before your time, Bernie -- when John Kennedy's controversial choice of Lyndon Johnson helped put Texas in the Democratic column.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): People don't usually vote for vice president, but a running mate can tip a close election. 2000 looks like it'll be close, with hand-to-hand combat over every piece of disputed territory. Once again, geography matters.

The true battlegrounds are big states that are also highly competitive. There are five of them -- 99 electoral votes at stake, all in a row. Call them, the "Battle Belt": New Jersey, Pennsylvania, Ohio, Michigan and Illinois. What do they offer in terms of running mates?

New Jersey offers Gore, Bill Bradley. Bradley has national stature and credibility on the reform issue, but too much bad chemistry for a good ticket. Bush could pick Governor Christie Whitman. Woman -- that's good. Big on abortion rights -- that's a problem. Why hand Pat Buchanan an issue?

Pennsylvania? Fifth largest state, but no big-name statewide Democrats for Gore to choose. On the GOP side, Bush is known to like Governor Tom Ridge -- popular, Catholic, Vietnam vet. But Ridge, too, is an abortion rights supporter.

Ohio, like Pennsylvania, has a scarcity of statewide Democrats. Republicans have Senator George Voinovich -- Catholic, anti-abortion, former mayor of Cleveland and former governor. This guy knows how to get Democratic votes. There's also Congressman John Kasich. Remember him? Ran for president -- briefly. Went on a bowling tour of Iowa. Offers a rare combination of Washington experience and youthful exuberance.

Up to Michigan. Detroit Mayor Dennis Archer is well regarded statewide. For Gore, the impact of putting an African-American on the ticket would far outweigh any geographical calculation. Governor John Engler was an early Bush booster. But he failed to deliver his state in a crucial primary, partly because some Democrats came out to vote against him.

Illinois offers Gore a Democratic senator with a populist image and a strong anti-tobacco record: Dick Durbin; Bush, a Republican senator who's Catholic, conservative, but independent-minded on issues like gun control and health-care reform: Peter Fitzgerald.

Some Democrats believe Florida may be a battleground, despite a governor named Bush. Putting moderate Senator Bob Graham on the ticket would help Gore make Florida competitive. And if Bush feels defensive about Florida, he could name retiring Senator Connie Mack, who's popular, Catholic, conservative, and a congressional leader.

But whether Florida is truly competitive may depend less on running mates and more on what happens to a 6-year-old boy named Elian Gonzalez.

(END VIDEOTAPE)

SCHNEIDER: Geography used to mean the Democrats had to put a Southerner on the ticket. They usually did. Even a liberal like Adlai Stevenson had running mates from Alabama in 1952 and Tennessee in 1956. A Southerner on the ticket doesn't seem to matter any more. Or really does it? The Democrats have elected three presidents since 1960 -- Lyndon Johnson, Jimmy Carter, and Bill Clinton -- all Southerners. This time, Al Gore's on the ticket, so y'all Democrats have taken care of that -- Bernie.

SHAW: Bill Schneider, thanks very much.

And there is much more ahead on this edition of INSIDE POLITICS. Why campaign watchers are talking about 527s and how they figure into the funding of the presidential race.

Also ahead...

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JENNIFER AUTHER, CNN CORRESPONDENT: Governor George W. Bush may be doing a Texas two-step to appear interested in California.

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SHAW: Jennifer Auther on Bush's complicated dance in a state that favors Democrats these days.

And later, the Bush-McCain phone chat and other political matters. We'll have a chat of our own with Margaret Carlson and Tucker Carlson.

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SHAW: We'll have more of this day's political news coming up, but now this look at some other top stories. Texas Governor George W. Bush declares Fort Worth a disaster area following Tuesday's twin tornado attack. The violent storms killed at least three people and injured more than a hundred. Downtown Fort Worth was virtually shut down and many homes in nearby Arlington and Grand Prairie were destroyed.

Authorities in Acworth, Georgia say a fire that killed eight people apparently started in or near a clothes dryer. Flames and smoke raced through the mobile home in minutes, killing a woman, her four children and niece, and a teenager and her baby. Neighbors say they tried to get into the home to rescue the victims but could not. A fire official says had the mobile home been equipped with a working smoke detector everyone probably would have survived.

Just moments ago, the Senate defeated a proposed constitutional amendment that would have banned the desecration of the American flag. The House passed the bill last year, but it did not get the two-thirds majority it needed to pass the Senate. Supporters said the amendment would protect the flag, but critics said it would weaken the First Amendment.

Six United States sailors were hurt today when their destroyer was hit by a big wave. The USS David R. Ray was about 7 miles off the California coast when the wave hit. The crewmen were airlifted from the ship to Stanford Medical Center. One sailor suffered two broken legs; other injuries included a dislocated hip and a concussion. An Air Force study of war veterans suggests a link between the herbicide Agent Orange and diabetes. Agent Orange was used by U.S. forces during the Vietnam War. According to the report, there is a 47 percent increase in diabetes among veterans with the highest levels of dioxin in their blood. Dioxin is the chemical in Agent Orange linked to health problems in laboratory animals.

Another story links diabetes to beta blockers which are used to treat high blood pressure. Researchers at Johns Hopkins University found the risk for developing diabetes 28 percent higher in patients that take beta blockers. However, the same study shows no connection between diabetes and blood pressure medicines known as ACE inhibitors and calcium channel blockers.

And when INSIDE POLITICS returns, how some groups are using a once obscure IRS loophole to inject big money into the presidential race.

(COMMERCIAL BREAK)

SHAW: A look now at what some people are calling a shadow campaign and its influence on the presidential race. CNN's Patty Davis reports on groups that can raise and spend unlimited sums on political activities without ever going public.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): It was 1996. Bob Dole had emerged the Republican presidential nominee. But a bitter and financially draining primary battle left Dole with little money to defend himself against well-financed Democratic and labor union attacks.

Scott Reed ran Dole's campaign.

SCOTT REED, DOLE '96 CAMPAIGN MANAGER: Bob Dole was on the receiving end of over $40 million worth of negative advertising. Remember, it was the Dole/Gingrich monster that was created out there by the labor unions, starting in the summer of '95. And that really damaged him because it gave the American people a negative view of him.

DAVIS: To make sure Republican candidates are not outgunned financially this election year, Reed is taking advantage of a provision in the tax code to form what's known as a 527 group.

REED: We cannot just allow the trial lawyers and the labor unions to dominate national politics. And in a way, Republicans were playing with one hand tied behind their back, and I believe this cycle you're going to see more of a level playing field.

DAVIS (on camera): 527 groups can raise and spend as much money as they want, and they're attractive because donor identities are kept secret. The only catch: They can't urge a vote for a specific candidate. (voice-over): This year, both the campaigns of Texas Governor George W. Bush and Vice President Al Gore are low on cash after expensive primary battles. Jumping in to fill the gap until the candidates each get $68 million in public funds this summer: the 527s. One such group, Republican-backed "Shape the Debate," has already fired the first round.

(BEGIN VIDEO CLIP, SHAPE THE DEBATE AD)

UNIDENTIFIED ACTOR: Who is Al Gore?

UNIDENTIFIED ACTOR: Correct

UNIDENTIFIED ACTOR: Political hypocrites for 600.

(END VIDEO CLIP)

DAVIS: Other advocacy groups and political parties also plan to spend heavily. The AFL-CIO plans to run issue ads again, though not spend as much as in 1996. The U.S. Chamber of Commerce says it will weigh in with millions of dollars.

With money constraints forcing the presidential candidates to wait in the wings until the party conventions, groups with big money are lining up for a no-holds-barred summer of spending.

Patty Davis, CNN, Washington.

(END VIDEOTAPE)

SHAW: And joining us now, Republican strategist Scott Reed is here in our Washington bureau. We're also joined by Larry Sabato, who wrote the book "Dirty Little Secrets" about the role of money in politics. Sabato also teaches at the University of Virginia and joins us from Charlottesville.

Scott Reed, you've set up a 527. How does it work? How did you do it and why?

REED: We set up a 527 called the Republican Leadership Coalition with the goal of going out and helping the Republicans maintain their control in Congress, and our focus is very specific. We are focused at the Hispanic and the Latino community, because we believe that if we do not go out as a party and aggressively seek these votes, we will have a very difficult time winning in the fall.

And our belief is very simple, you need to go to the community, you need to talk about ideas and policies that matter, like health care, like education, like insurance for those that don't have -- those that are uninsured. And again, our idea is we're going to communicate directly to the people, usually in Spanish, go right into the barrios, right into the neighborhoods and attempt to attract them to the Republican Party, because we know we have a message and it's a strong message, and we can't leave this whole part laying on the playing field. SHAW: Larry Sabato, how does unregulated money either by the IRS or the Federal Election Commission affect the political process in this country?

LARRY SABATO, POLITICAL ANALYST: It affects it enormously, Bernie. I have no particular objection with the group that Scott set up. My objection is to the fact that you can have millions, potentially hundreds of millions or even more spent in this fashion and not have it fully disclosed.

We don't know who the donors are. These donors can be giving enormous sums of money that are used for the candidates and there is this tiny fig leaf, which basically is that the groups are very careful in structuring the advertising or the mailing or whatever. They don't say vote for or vote against, but any idiot can watch the television ad or read the mailer and know which candidate they are for.

SHAW: Scott.

REED: Well, Larry, you know, I was on the receiving end in '96 and felt it right on the chin as did a lot of other Republicans, and you know, the Democratic Party has basically used the labor unions to do all their organizational efforts and now the trial lawyers to raise all their money, and we just cannot step by and step back as a party and allow that to go unanswered.

I can't speak for all the 527s, but ours, the Republican Leadership Coalition is going directly at issue-oriented ideas to bring people into the party. And those of us that are party builders, this is a fine thing to do, it's positive, it's innovative, it's creative, and most importantly, hopefully it's going to get more people involved in politics.

SHAW: What is the difference between that and advocating a candidate's position without mentioning vote for candidate X or Y, Scott?

REED: Well, that's a question for the lawyers, but, you know, again, our avenue is to go out and specifically talk about ideas and issues that connect with voters. The Republican Party has got to get away from being put on the defense over issues like prescription drugs where we've been put in the corner as defending the pharmaceutical companies and not defending grandma.

SHAW: Well, Larry Sabato, to my question, is there a difference?

SABATO: There is no practical difference. There is a legal distinction, and Scott's answer is very revealing. That is the problem with our current system. It really is defined by the lawyers, it is of the lawyers and sometimes I think it is for the lawyers. Look, there -- I will tell you the honest truth.

527s which are both Democratic and Republican -- Scott does not have and the Republicans do not have a monopoly on 527s. There are plenty of liberal groups that have 527s. What this really points up is that the current system and maybe any system that's devised on campaign finance, if you regulate it substantially, if you try to regulate First Amendment rights, this is the kind of device you're going to end up with.

SHAW: OK, in the remaining time, both of you tell our viewers what we can expect between now and the summer conventions given the hundreds of millions of dollars from 527 groups that will affect the next four months. Governor Bush is going to be out raising millions for the RNC next month. Vice President Gore will be doing the same thing for the DNC.

Can we expect a deluge of these kinds of ads, Scott?

REED: I don't think you're going to see a deluge, but I do believe, like in Bill Schneider's earlier piece, you're going to see the campaigns focus on those real battleground states, those states in the Midwest where at the end of the day this whole campaign is going to be fought out and either Gore or Bush has to win four or five of the states that Bill put up there tonight or they're not going to win.

I don't think there will be an overdose of this. There are more important things going on right now in shaping the terms of the debate of the race, which both candidates are out there aggressively trying to do. But again, the focus has to be on those swing states, those battleground states, that's where it all comes down.

SHAW: Larry Sabato.

SABATO: Basically, I think there will be an orgy of fund raising and also of negative attack advertising in lots of different ways from both sides. Listening to Scott earlier, I wanted to cry some crocodile tears.

I had no idea that the Republicans and George Bush with all those Pioneers out there raising tens of millions of dollars, I didn't know that they were so hard up for money, and of course, Al Gore isn't hard up for money either. Here we go on another track raising lots more money that will be used to air vicious negative television ads for eight long months. Oh, I feel so good about this process.

REED: Larry, you need to come out of that little tower you are in down there in Charlottesville and see what it's really like on the front line, that ivory tower, step out for a while.

SABATO: It's a wonderful place, come into the tower, Scott. It's a great place.

SHAW: On that note, gentlemen, Scott Reed, Larry Sabato, thanks very much, good to have you in on a very important subject, thank you.

SABATO: Thank you.

SHAW: Welcome.

And just ahead, find out who's playing politics with prices at the gas pumps. Also, is George W. Bush ignoring California? Should he? The answers when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

SHAW: Let's go to California now and presidential politics. The state is considered a must-win for Democrats. For Republicans, it's not as vital. It's a bit puzzling, then, as to why California remains a battleground this year.

CNN's Jennifer Auther sorts it out.

(BEGIN VIDEOTAPE)

AUTHER (voice-over): Amid a hunt for endorsements and a way to pull to the political center, Governor George W. Bush's efforts to reach out to California may be something of a Texas two-step.

BILL CARRICK, DEM. POLITICAL STRATEGIST: There's a little dance that goes on here. The Republicans have to pretend that they're going to pursue California and try to be competitive to suck the Democrats into spending some money.

AUTHER: It's become a ritual in a state which in recent years has turned golden for Democrats, including Vice President Al Gore.

CNN exit polls from the March 7 primary had Gore with a 12 percent lead among California voters who were asked about the fall match-up.

Facing long odds in 1992, President George Bush cut bait early rather than fish in California. Senator Bob Dole did the same in '96. Both times Bill Clinton won the election.

For a while, it looked as if this Bush might reel it in here early as well.

(on camera): Rumors over the past week were that George W. Bush was closing down his California headquarters here in Los Angeles. After nudging from some California Republicans, those attuned to the lower-ticket races, this office remains open, but with a skeleton staff.

(voice-over): Despite his speeches on education, the number one issue in California, bush hasn't been polling well among many groups who care about that issue. For example, he garnered only 18 percent of the Latino vote in a recent field poll despite his outreach to that Hispanic community both nationally and in Texas.

At one point in 1999, Bush was supported by some 30 percent Latino voters in California. Voters say he has a lot to do to reclaim that.

ALLAN HOFFENBLUM, GOP POLITICAL STRATEGIST: What George W. Bush has to do with Latinos here in California is to continue doing what he's been doing here for almost two years now. He's done extensive interviews with Spanish-language newspapers, Spanish-language television, Univision.

AUTHER: In fact, Bush's latest $5 billion policy speech on education is being made available on a nationwide feed with subtitles in Spanish.

Nationally, Bush has polled better than many other Republicans among women voters.

What about women in California?

MARK DICAMILLO, DIRECTOR, FIELD POLL: Women who are ethnic minorities, either black or Latinos, are much more likely to prefer Gore over Bush than any other female constituency. At the other extreme, if you look at white women, particularly married white women, you will find that Bush is preferred by double-digits over Gore.

AUTHER: Those inroads among women voters could encourage Bush here as well as his popularity among suburban voters.

DICAMILLO: When you're really looking at the interesting and kind of up-for-grabs suburban voter, it's the suburban vote around Los Angeles County. That's where the exit polls are showing the race is fairly close. If you look at Riverside County, San Bernandino County, Ventura County, even San Diego, you can see that there is a relatively small preference margin. Actually, Bush has a slight lead.

AUTHER: Finally, there is a big-picture reason Bush might not toss-in the towel too early. There are four key seats, all in battleground areas of California that could take Democrats this fall a long way toward regaining a majority in the House of Representatives.

Republican strategist say a strong presence at the top of the ticket would help them hang on to those seats and a congressional majority.

Jennifer Auther, CNN, Los Angeles.

(END VIDEOTAPE)

SHAW: California has another distinction these days. It's where some of the highest gasoline prices in the country are found. These prices have become a hot political issue across the country, but according to the group Competitive Media Reporting in Nebraska, GOP senatorial candidate George Grogan spent more than $30,000 on an urging a lowering of the gas tax, a substantial part of his overall advertising budget.

A look now at the ad as well as how Connecticut's Governor John Rowland is approaching the subject.

(BEGIN VIDEO CLIP, GROGAN CAMPAIGN AD)

UNIDENTIFIED NARRATOR: Ten years ago, America fought the Gulf War to save the OPEC nations from the tyranny of Saddam Hussein.

GEORGE GROGAN, GOP SENATORIAL CANDIDATE: And the thanks we get -- pull your family car up to the gas pump and you'll see. Gas prices are skyrocketing and Bill Clinton doing nothing. America deserves better.

As your senator, I will fight to stop the foreign aid that's currently going to those greedy OPEC nations, and I'll vote repeal the gas tax increase that the politicians told us was temporary.

UNIDENTIFIED NARRATOR: Fighting for us, George Grogan, Republican for Senate.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GOV. JOHN ROWLAND, CONNECTICUT: Hi, I'm Governor John Rowland.

Did you know that the gas you're pumping right now has the highest gas tax in the entire country? That's right, Connecticut has the highest gas tax in the country, and it's time we change that. I have a proposal to cut the gas tax by 7 cents a gallon and to do it by April 1.

(END VIDEO CLIP)

SHAW: The sales tax on gasoline is also an issue in the gubernatorial race in Indiana. Republican candidate John Price wants the tax rolled back. He says the state should not be making a windfall from the higher prices.

When we return, the latest numbers from the New York Senate race. Is Rudy Giuliani losing ground? We'll also have some thoughts on today's political news from Margaret Carlson and Tucker Carlson.

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SHAW: A new poll shows voters in New York State overwhelmingly disapprove of Mayor Rudy Giuliani's handling of a recent police shooting, and it's apparently costing him in a Senate match-up with Hillary Clinton. Giuliani's lead over the first lady has been cut to three points, down from six points last month. Now that's within the poll's margin of error, and it's the closest Mrs. Clinton has been to Giuliani in this poll since last April. Half of those polled disapproved of the mayor's handling of the shooting of Patrick Dorismond, who was not armed. Only 26 percent approved of the mayor's actions.

Joining us now, Margaret Carlson of "Time" magazine, here in Washington, and Tucker Carlson of "The Weekly Standard." He joins us from Miami.

SHAW: Margaret, will the release of the juvenile records belonging to the dead man be a permanent issue in this New York Senate race?

MARGARET CARLSON, "TIME" MAGAZINE: Well, you know, the police shooting itself might not have been a longstanding issue. This is the fourth in 13 months, but the release of the records, which most people think is illegal. The release of juvenile records -- even after someone has died, the privacy right continues -- you know, set off a spate of criticism of the mayor, and he kept digging himself in deeper all last week, defending himself by saying this guy was no altar boy. He went around all his life punching people, which there was no evidence of that. The worst thing he was guilty of was no crime but the offense of disorderly conduct. So he smeared the guy before he was even buried, never sympathized with the family, and was aggressive beyond all belief.

I mean, Mayor Giuliani does not need to reinforce his law and order credentials.

SHAW: Tucker.

TUCKER CARLSON, "THE WEEKLY STANDARD": Well, I mean, Giuliani is acting like a New York City mayor, I mean, like a pugilist. And that works in New York. It's worked for him for two terms. I'm not sure that's what people are looking for in a senator.

That said, I have trouble believing that this issue is going to resonate with voters outside -- with anyone other than liberal voters within Manhattan. So in that way, it's kind of a curious tact for Mrs. Clinton to take. She is, it seems to me, essentially trying to shore up her support among people who are very concerned and will vote on the basis of things like that. And that mostly is Manhattan Democrats.

I just don't see Westchester and upstate voters getting so upset about this, not saying they shouldn't be upset about it. But I just don't see them getting so upset that they're going to vote against Giuliani on the basis of it.

SHAW: Margaret, what about this Mark Green suit?

M. CARLSON: Well, Mark Green is asking for an inquiry into the release of the records. And so two committees of the New York state legislature are also looking into it. So to that extent, it doesn't go away and people are concerned about juvenile records, and it's just symbolic of a gratuitous unnecessary aggression on the mayor's part.

And it's more than pugilism. I mean, every piece of information we have suggests that this guy was unarmed, he wasn't doing anything, and he ended up dead on the sidewalk in New York.

And the mayor -- it wasn't just, you know, doing what the mayor does. He's proved that he can make the city safe, and these voters that Tucker's talking about, once the city's safe they can afford to look at how the mayor is doing it. They wouldn't have done that four years ago. But given that the city is now safe, they might say, well, is the cost too high?

T. CARLSON: Well, I mean, there are a lot of specifics in it. Sure, and it's, you know, polls show that it's appealing. It's appealing to women. That's obviously important to Bush. He may wind up having the smallest gender gap of any Republican candidate in memory.

I think it's interesting, you know, here's a Republican candidate saying, you know, pledging to spend, you know, $5 billion on education, and you don't see conservatives causing a stir or outcry.

It's interesting: Bush has in a very short time -- you know, it's been less than a month -- kind of reclaimed more of the center and nobody seems to be noticing. It's interesting, kind of clever politics.

SHAW: Margaret.

M. CARLSON: That is interesting, because conservatives used to scream about the federal government having anything to do with education, and now that's the hallmark of the Bush appeal to middle- of-the-road voters. The problem with his plan is, however, there's no $5 billion once you put his other programs into effect, particularly the tax cut.

T. CARLSON: Oh, there are lots of billions of dollars. But I guess what's interesting here is that...

M. CARLSON: They're quoting everywhere. Just grab a few.

T. CARLSON: That's absolutely right: billion here, billion there. But it's interesting that Gore is using, or appears to be using, the same tactic he used on Bill Bradley: My opponent is a wild- eyed spendthrift. In other words, almost going after Bush from the right on this issue, or at least from the position of fiscal responsibility.

It worked with Bill Bradley. I'm not sure it's going to work as well with Bush, mostly because (a) his Republican voters are less likely to believe that he's a wild-eyed spendthrift and (b) I think people are in the mood to spend a lot on education in general.

SHAW: Vice presidential running mates: What do you think, Margaret -- first you -- of Senator Olympia Snowe's suggestion to Mr. Bush on choosing a pro-choice running mate?

M. CARLSON: Well, by the time we get to the summer, you know, both candidates will have nailed down their bases and they will be fighting over the middle. You know, everybody has gone to the middle practically already. But I don't -- I still think Bush is going to have to work on that, given how he ran the primary, and also because, you know, the Republicans need that, you know, the so-called "soccer mom." And a pro-choice running mate would help with that. A woman would help even more.

Christie Todd Whitman, or hey, Olympia Snowe would be -- would be good choices for him. I don't know if he'll go that far. He may -- he may that he doesn't need to go that far to the center, left of the center, to get what he needs. But it would be the kind of choice that would create some excitement for him.

T. CARLSON: Well, I mean, Christie Todd Whitman would definitely create some excitement, I'm not sure the kind of excitement he wants. I mean, she -- she has never done well in elections in New Jersey. I don't think she's won women in New Jersey either time.

The Republican base voters dislike so her intensely that that -- that's just a guaranteed way to get huge protests at every event. I'm not sure by -- by the summer Bush will need to go that far to the center or to the left. I think it will have -- I don't think there will be reason to do that.

SHAW: Well, before we leave you, the governor seems to be going a bit closer to Senator John McCain. Effective, Tucker?

T. CARLSON: I think it is. I don't see any reason for Bush and McCain to kiss and make up now. It doesn't seem like it's going to benefit either of them.

Six weeks from now, if they have some sort of summit on campaign finance, it would get a great deal of publicity. Notice that Steve Forbes' endorsement the other day sank beneath the waves as a news event. It had basically no effect. People weren't paying attention. I think a month or two from now they will be.

SHAW: Will they, Margaret?

M. CARLSON: Well, there's only been a phone call. I mean, there's a long time sometimes between that first phone call and the first date. So he's still got the drama on his side.

Well, that's all for this edition of INSIDE POLITICS. We'll see you again tomorrow when Bruce Morton will have a report on the presidential battleground state New Jersey. And of course, you can go online all the time at CNN's Allpolitics.com.

And this programming note: The New York Senate race will be the topic tonight on "CROSSFIRE" at 7:30 p.m. Eastern. The guests will be New York City public advocate Mark Green and Congressman Vito Fossella.

I'm Bernard Shaw. "WORLDVIEW" is next.

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